Property buyer guide
Useful Guide to buy the property in Spain
This guide is meant to give you the overall idea of the entire purchasing process in Spain. We want to be sure that you buy safely and follow the correct procedures avoiding stress and unfortunate surprises.
Step 1: The exciting part!
The first step is appealing. We have prepared the best selection of available developments which can be seen in one place, our website.If there is anything you are interested already, please write to us and we will provide you with all the necessary information, let us find you the most suitable property according to your needs. You are welcome to come and visit us and will be be happy to organize you the meetings and show you the properties. We will do our best so you could make your decision easily.
Step 2: Reserving the Property and Deposit Policy
As soon as you have selected the property we will reserve it for you and remove it from the market.
We would provide you with a reservation document for you to sign in which all the terms of the agreement are set out. Together with the signature of this document, you will need to leave a deposit which will vary depending on the selected property. This is to officially take the property off the market and acts as an intent to purchase.
On this stage we would recommend a independent law firm to represent you in the purchase, this will make the whole process much easier and less stressful for you.
The lawyer will carry out all the necessary legal procedures of the purchasing process, including:
– Determining who the owner of the property is to verify that the vendor is entitled to sell the property.
– Checking that the property is legally registered in the corresponding property registry. 2
– Checking that the property is free from charges & debts (mortgages, seizures, etc.)
– Checking that the property has been granted the corresponding municipal building permit by the town hall.
– Ensuring that the legal prescriptions of the planning and building law are complied with.
– The study and signing (if required) of private contracts (examples: reservation agreement, purchase contract, etc.) or public ones (example: public deed) which are deemed necessary to execute the purchase operation. The normal procedure is to sign a private purchase contract first, and after a reasonable lapse of time, to sign the public deed.
The lawyer will then proceed to pay all the expenses and taxes arising out of the purchase on your behalf. This includes registering the public deed in the corresponding Land Registry.
Simultaneously, the lawyer will effect, when applicable, the change in ownership of all bills, supplies and taxes concerning the property, and if you wish, will arrange the direct debiting of those bills (from your own bank account in Spain).
Once the lawyers have finished their legal checks, the next step would be either:
– Exchange of contracts (if applicable): Go to Step 3.
– Completion: Jump to Step 4. Finally, if you need to take out a mortgage, we can give you some recommendations.
We do not offer this financial service ourselves, but we will point you in the right direction and put so you can get special mortgage conditions when you buy a property in Costa Del Sol.
Step 3: Exchange of Contracts
Exchanging contracts is a legally binding stage of the property buying process, once contracts have been signed and exchanged you are legally bound to buy the property and the developer is bound to sell it.
This will depend on the chosen property, but the exchange of contracts is usually accompanied by a payment of 20%.
Step 4: Completion The big day has come and today you get your keys!
On completion day, your lawyer will arrange for the agreed amount to be transferred or a cheque be prepared and the public deed will be signed. You can them move to your new home! Completion can be done in person, however if you cannot be here you can also give your lawyer a power of attorney to sign on your behalf.
If you wish, we can recommend experienced and trusted partners for any further services you may require after completion, like decorators, garden designers, etc.
The purchase costs are approximately between 12-14% of the purchase price and the exact amount will depend on various aspects of the purchase.
Approximate breakdown of costs:
– Government Transfer Tax (IVA): 10%
– Legal Fees: 1% (may vary depending on law firm and services offered)
– Notary & Registry Fees: 1%
– Mortgage Fees (if applicable): 1-2% (may vary depending on mortgage)
Fees & Taxes
In addition to the fees associated with buying a property, you should also take into account the running costs. These include:
– IBI (local property tax)
– Basura (rubbish tax)
– Comunidad (community fees)
– Garden and pool maintenance in case of an independent villa
– Building insurance
– Utility bills (electricity, gas, telephone, water, etc.) Annual running costs usually are around 2-4% of the cost of a property.